The NBA was confident — bordering on cocky, really — that the players’ union had zero chance to win a case concerning salary-cap minutiae known as Early Bird Rights. But an arbitrator threw the league for a loop on Friday, ruling in favor of the union. The league said it would appeal.
The ruling is crucial to the Knicks because it affects their ability to re-sign point guard Jeremy Lin (and forward Steve Novak) while retaining financial flexibility to pursue other players. In the simplest terms, Bird Rights allow teams over the salary cap to re-sign their own players. The Knicks are over the projected cap for next season even though only six players have guaranteed money at this point; such is life when you pay Carmelo Anthony and Amar’e Stoudemire $40 million combined. The Knicks claimed Lin and Novak off waivers last season (the Clippers did the same with point guard Chauncey Billups and the Trail Blazers with power forward J.J. Hickson). In the past, Bird Rights haven’t applied to players acquired that way; the collective bargaining agreement specifies that Bird Rights only go to players who have stuck with the same team or changed teams via trade.
The issue hasn’t been too important because teams rarely clamor to keep waiver wire players. The Knicks, of course, are clamoring to keep Lin. If they are allowed to do so via Bird Rights, they can re-sign Lin (and possibly Novak) and retain the mid-level exception, which allows teams over the cap to sign a rival team’s player for up to the league’s average salary (about $5 million per year). Without Bird Rights, the Knicks would have to use the mid-level exception to bring back Lin, which would mean they could not save it to sign another free agent — someone like Steve Nash. But with Bird Rights, they could sign Lin and Novak, and still have the mid-level in reserve.